3 Key Changes in GST from 1 January 2019

3 Key Changes in GST Will Be Reflected From 1 January 2019

3 key changes will be reflected in Singapore’s GST as of 1 January 2019. These key changes involve Customer Accounting, Hand Carried Exports Scheme (HCES), and the GST Registration Rules.

Beginning 2019, a business now only needs to monitor their annual taxable turnover. They will also need to assess their GST registration on a retrospective basis. This can be done at the end of each calendar year. Businesses will no longer need to monitor their GST registration liability based on their past four quarters.

GST Key Changes 2019 – Customer Accounting

Changes in the GST as of 2019 involve Customer Accounting on the sale of prescribed goods. Instead of the suppliers, it is the GST-registered customers who will have to account for the GST on the local sale of prescribed goods. These goods include memory cards and mobile phone devices. It also includes off-the-shelf software which exceeds an amount of $10,000 including GST.

As part of the GST key changes, the supplier must indicate what the customer’s GST registration is on their tax invoice documents. The supplier will then proceed to collect an exclusive GST price. The supplier will then have to include a statement which declares the following:

“Sale has been made under customer accounting. Customer is to account for GST of $XX (amount)”

The statement must be declared on the tax invoice.

As for the customer, a GST account will be created for you on behalf of the supplier. This is done by reporting the GST-exclusive price and the amount of GST incurred. The information must be filled up in Box 1 and Box 6 of the GST F5 form respectively.

GST Key Changes 2019 – Hand-Carried Exports Scheme (HCES)

Changes in the GST as of 2019 involving the HCES now requires that additional documents be presented as evidence for zero-rating of goods which are hand-carried through Changi Airport. The documents which must be provided now include:

Copies of the invoices issued to overseas customers for goods that are sold.

Export permits containing original endorsements from the Singapore Customs.

Evidence of payments which are made to an overseas customer refunding any prior collected GST.

Evidence that payments have been received from the overseas customer (This is a new, additional requirement for GST as of 1 January 2019).

GST Key Changes 2019 – GST Registration Rules

The Inland Revenue Authority of Singapore (IRAS) takes a strict approach against tax crimes in Singapore. IRAS has a commitment to detecting tax crimes and prosecuting minority taxpayers who attempt to evade taxes. This move is to help protect and be fair to the majority of taxpayers who are fulfilling their obligations.

IRAS has successfully prosecuted the following tax evaders as of August and September 2018:

6 weeks’ jail time and a minimum penalty payment of $92,419.83 for false entries into the GST returns. These false entries were done with wilful intent to evade taxes, this offence was committed by a sole-proprietor of a general wholesale trade firm.

Penalty payment of $344,500 and a fine of $17,500 was dealt out to a sole-proprietor who provided recruitment services. The offence was understanding income without a reasonable excuse and failure to notify IRAS of the liability to be registered for GST.